The United States and China on Monday opened annual high-level talks amid tensions over China's aggressive island-building activities in the South China Sea as well as trade disputes between the world's two largest economies.

North Korea was also expected to be on the agenda for the two-day U.S.-China Strategic and Economic Dialogue (S&ED). The talks are the highest-level regular dialogue channel between the two countries.

Representing the U.S. at the talks are Secretary of State John Kerry and Treasury Secretary Jacob J. Lew, while their Chinese counterparts are State Councilor Yang Jiechi and Vice Premier Wang Yang.

In an opening speech, Chinese President Xi Jinping said Washington and Beijing have been in cooperation over regional security issues, including nuclear issues on the Korean Peninsula and Iran.

This week's talks come amid deepening tensions over China's ongoing construction of artificial islands in the South China Sea in an apparent bid to bolster its territorial claims in the waters also claimed by the Philippines and Vietnam.

China stepped up its island-building activities in the South China Sea as the Permanent Court of Arbitration in The Hague is expected to rule on a case brought by the Philippines in the coming weeks. China has said it would not recognize the international court's ruling over its territorial claim in the South China Sea.

During a regional security forum in Singapore over the weekend, U.S. Defense Secretary Ash Carter warned that China risks building a "Great Wall of self-isolation" with its aggressive military activities in the South China Sea.

U.S. officials said Washington would also call for Beijing to increase its pressure on North Korea to help give up its nuclear weapons ambition.